Blake: All 'hail' the taxi industry's last legal monopoly

Once again, it seems, entrepreneurs and their customers are pushing the recently liberalized ground transportation industry to become even more liberal.

The Colorado Public Utilities Commission recently issued a “consumer alert” warning the public not to solicit — or accept — rides from limousines or “transportation network companies” (Uber and Lyft et al.) unless they’ve made prior arrangements with them.

“Not only is it illegal, it is a safety issue for consumers,” said PUC Director Doug Dean. Only a traditional taxi company can accept street hails in Denver, he noted.

Hailing limos and unmarked cars? Who knew this could even be a possibility? Apparently consumers smarter than me can spot an idle limo — or even an idle TNC vehicle — and solicit a ride without using the company app on their phone. And the drivers of such vehicles are equally adept at offering rides to likely-looking pedestrians when not already booked.

Dean is right about the safety issue. Who wants to get in an unmarked car with a stranger? That’s one reason why hitchhiking, so common in the U.S. into the 1970s, has almost disappeared,

And that’s why Uber and Lyft don’t deal in cash and send out pictures of the drivers and their cars to those who use their apps to call up service. A passenger can be as dangerous to a driver as a driver is to a passenger.

Limo and TNC drivers have another reason to take the PUC alert seriously. The PUC uses “sting” operations to entrap the unwary driver.

The PUC conducted “enforcement activities” in downtown Denver several times last year and issued civil penalties to about 15 drivers who illegally picked up street hails, a PUC spokesman said.

The sting was probably at the behest of taxi companies, already under siege from new competition and resentful of those who would horn in on street hails, their last legal monopoly.

Street hails are a relatively new development in Colorado. They’re still virtually unknown in the suburbs, and Denver City Council only legalized them in 2007, a year in advance of the Democratic National Convention here. Then-Mayor John Hickenlooper didn’t want delegates coming from all over the U.S. to think Denver was cowtown where you couldn’t hail a cab.

Even now street hails are relatively rare, most times, said taxi entrepreneur Abdi Buni. But they are common after Rockies’ and Broncos’ games, and in downtown Denver on weekends between 12:30 and 2 a.m., when bars are emptying out.

Until a few years ago there were only three taxi companies in metro Denver and no Uber or Lyft. It was as cozy an oligopoly as you could enjoy. But the legislature finally got around to changing the law so that a would-be cab company no longer had to prove to the PUC, in advance, there was a “need” for their business.

It seems quaint now, but there used to be regular hearings where an applicant had to round up people who would testify, in a court-like setting, that the existing companies didn’t meet their needs. Lawyers for the Big Three cab companies were practiced at assuring the PUC that they had everything under control and there was no need for further competition.

The PUC, like many regulatory bodies, were in thrall to the people they were supposed to regulate and almost always turned down the applicant, who had to spend thousands of dollars in vain.

Now there are six cab companies and more trying to get started. The TNCs are also competing. The increase in street hails is a good sign and maybe the state laws, and local ordinances, will be further liberalized.

The state, and municipalities, have the right to insist that vehicles soliciting street hails be marked with certain colors, numbers, and signs in order to ensure the safety of the passenger. But they shouldn’t have to be the current cab companies.

Maybe someday cabs and vans will cruise major bus routes and fill up with passengers paying a flat fee. The RTD wouldn’t like that but it would need fewer empty, expensive buses and spend fewer tax dollars.

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Cabs lined up at Denver International Airport – credit: Todd Shepherd

The taxi industry is awaiting Denver International Airport’s plans, expected later this week, to bid out taxi service there. Right now all six cab companies can go there, though they are limited in the number of cabs they can send each day. Some cab companies fear the decision will be political. (Who gave the most to Mayor Michael Hancock’s campaign coffers?)

But it doesn’t have to be. If the airport thinks too many cab companies are serving the airport, it can, say, authorize three companies to operate on even-numbered dates and three on odd-numbered ones. After all, DIA makes plenty of money off cabs — $4.57 per each trip to the airport. There’s no need to grant a near monopoly.